Abstract
Australia entered the 1980s with separate policies for its international and domestic airline industries and both restricted the scope for competition. Since then, the Australian Government privatised its airlines, it deregulated its domestic industry, it agreed to a single aviation market with New Zealand, it relaxed its attitude to foreign investment in Australian airlines, and it has embraced a relatively liberal position in relation to international markets. Aviation policy is assessed according to whether it delivers net benefits to the Australian community. This paper explains the background to the main changes in policy and raises issues that need to be addressed as the forces of competition in dynamic markets continue to put current policies under further pressure.
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